The numbers: Sales of new homes in the U.S. fell in April for the fourth month in a row to the lowest level since the pandemic owing to high prices and soaring mortgage rates.
New sales slowed to a 591,000 annual rate from 709,000 in the prior month, the government said Tuesday. That's how many homes would change hands in a full year if the number of sales were the same in every month as they were in April.
Big picture: The red-hot housing market was bound to cool off after mortgage rates jumped from just 2.75% in the fall for a 30-year fixed to more than 5.25% in mid-May. Low mortgage rates had made it easier for buyers to purchase a home despite record prices. Builders, for their part, still aren't producing enough homes to meet demand. High material costs, supply and labor shortages and lack of cheap lots are among the constraints holding back construction. A slower housing market is also likely to weigh on the broader economy. When people buy homes, they also need to buy lots of stuff to furnish it.
Key details: Sales fell in all four major regions of the country, but the largest decline occurred in the South, where about half of all new homes are built. Sales sank 20% in the South.
reverse the upsurge in prices over the past few years.